As I noted at the time, perhaps the most revolutionary aspect of the Hargreaves Review of copyright in the digital age was simply the idea that copyright policy should be based on evidence. Of course, the fact that until now it has been determined purely by dogma, and drawing on bogus statistics put out by the copyright industries, is incredibly damning.
Happily, more and more evidence is becoming available around the world, but naturally the UK government will prefer to base its decisions on research that relates directly to this country. So the recent release of a "tracker study", commissioned by Ofcom, is extremely good news, since it means that things are finally beginning to happen in this area.
Here's the background, taken from the study's introduction [.pdf]:
This report details the main findings of a large-scale consumer tracking study into the extent of online copyright infringement, as well as wider digital behaviours and attitudes, among people aged 12+ in the UK. The study was commissioned by Ofcom, undertaken by Kantar Media and made possible by financial support from the UK Intellectual Property Office (IPO). It is the first in a series of research waves intended to generate benchmarks and time series relevant to the access and use of copyright material online.
The research stemmed from a recommendation in the 2011 Hargreaves Review of Intellectual Property and Growth that Ofcom should not wait until its formal reporting duties arising from the Digital Economy Act began to start gathering independent data and establishing trends in the area of online copyright. Government adopted this recommendation and tasked Ofcom and IPO to work together to conduct research to gather the necessary evidence. This report is the result of this partnership.
As the report itself notes, this is just the beginning of the journey:
Our hope is for this study to be a useful first step in improving and building the necessary evidence base for online copyright infringement policy. Our aim has been to report the data neutrally and without interpretation. Where we have made assumptions about the research we have noted this and our approach is available to scrutinise in the technical appendix at the end of this report. Alongside the report we have also published edited data tables and slide packs for those who wish to analyse the data themselves, and full tables are available on request.
That last comment about providing the data tables in both an edited and full version upon request is interesting and welcome: it represents a major shift in the attitude of those commissioning this kind of research, who have tended to take a rather proprietorial attitude to the data. Making that data available for others to analyse not only increases the transparency of the investigation, it increases its credibility, since anyone who is dubious about a finding can check it for themselves. This should really become the norm for all such research, including any industry-funded work that wishes to be taken seriously.
The main analysis is found in a separate 94-page document [.pdf]. One of the key issues is how to measure "illegal content". Here's what the report decided to do:
For the purpose of overall legality calculations we have made an assumption throughout that all content that individuals claim to have paid for is legal (including physical discs). We acknowledge that this is an imperfect assumption to make, since some people will have paid to access online content illegally. This can involve direct transactional payment for a piece of content, or a payment in respect of bandwidth, hosting, premium services or membership of a file-sharing community. Equally, it is possible that a proportion of physical paid-for content is pirated or bootlegged.
Nevertheless we have revised the questionnaire for the second wave of this research to accommodate consumption of infringing content via unlicensed, paid-for sites. We will publish a full report relating to this in the next wave. However, provisional data from this second wave suggests that paid-for illegal content does not make a significant difference to the overall number of infringers within the total online population.
That's an interesting point: it means that paid-for sites offering unauthorised copies probably aren't a huge problem in the overall scale of things, despite exaggerated claims to the contrary by the US authorities in their desperate attempt to paint Megaupload in the worst light.
Here are a couple of key results about accessing content and sharing:
Sixty-six per cent of internet users aged 12+ claim to have ever downloaded or streamed/accessed content online (i.e. consumed) across the six content types evaluated, with 56% having done so in the past three months. Sharing doesn't add to this proportion, meaning that if someone shares files, they generally also consume them.
Sharing content (actively) was shown to be a niche activity in general – just 11% of internet users claimed to have done this, dropping to 8% in the past 3 months. Music was the most commonly shared content type (5% in the past 3 months, compared to 1-2% for the other content types).
That's really a very small proportion. Now, a major caveat is that these figures are entirely self-reported: that means respondents were effectively asked to incriminate themselves. I'm sure that has led to underreporting, maybe by a significant factor. But even taking that into account, it seems that unauthorised sharing is not a huge problem – we're not talking about the vast majority of users engaging in it, for example.
The report has this to say about the payment patterns of those interviewed:
Of those who downloaded or accessed content during the past three months from any of the types covered by this report, the great majority (87%) consumed at least some of it for free. This equates to nearly half of the 12+ internet population (49%).
That's not really surprising, since much content online is intended to be consumed without payment (think of YouTube.) The question then becomes how much of that free stuff was unauthorised. Here's what the research found:
Across all the content types covered in this report, 29% of those who claimed to have consumed content online during the past three months indicated they had consumed at least one item illegally. This equates to 16% of all internet users aged 12+. Furthermore, 8% of those who consumed content in the past three months did so exclusively illegally (4% of all internet users).
Again, that's a very small (self-reported) number. And the corollary of that is that 12% of all Internet users accessed both legal and illegal copies, rather more significant. Moreover, it turns out that this particular group actually spends far more than people who only buy illegal or legal copies. Here are the figures for the main categories of content:
In terms of the three ‘legality' groups discussed earlier, those who accessed a mix of legal and illegal music spent the most on music (£77.24), with ‘100% illegal' (£13.80) the least. Those who claimed all their music was obtained legally were between these values, at £43.31.
As with music, those who accessed a mixture of legal and illegal films online claimed to spend the most on the category as a whole (£56.11), with the ‘100% illegal' group spending the least (£28.25). This compared to £35.57 for the ‘100% legal group'.
Those who accessed a mixture of legal and illegal online TV programmes spent the most on the category as a whole (£25.69 49), with 100% illegal spending the least (£3.51). The 100% legal group sat in between with £8.28.
That's a remarkable finding, especially given its consistency across different types of content. But it's not unprecedented. In fact there's a growing body of research that suggests people who download unauthorised copies - "pirates" - spend more than those who only buy authorised versions. It's fascinating to see Ofcom's own research confirm that important finding.
What this probably means is that many people are downloading free copies not to avoid paying, but to find out what is worth paying for. In other words, it's really just a kind of marketing. To be sure, some people don't go on to buy anything, and they are free riders who take advantage of the availability of material. But the Ofcom research shows that most people who access stuff for free go on to spend money, in part because they doubtless recognise that if artists don't receive compensation for their work, the latter will ultimately be unable to create.
The new research also has some important results about why people don't always go on to buy works, but simply access unauthorised versions:
The free aspect (54%) was the main motivation for illegal downloading, with convenience (48%) and speed (44%) also cited highly.
Clearly, some people simply want things for free, but it's worth noting that convenience is a key issue for nearly half of respondents. That suggests that if it were easier to buy stuff than it was to download unauthorised versions, people might switch. That's confirmed by the current report:
The most-stated aspects that would encourage those who currently infringe to stop were: if legalservices were cheaper (39%) and if everything was available legally (32%).
This is a common, and justified complaint. Too often, people are unable to find content that they are looking for – many new TV shows suffer from this to a great degree – or, if they are, the prices are really exorbitant. Making content available and at fair prices would clearly have a huge impact on unauthorised downloads.
There are some useful graphs included in the report that fill out this aspect. They show "willingness to pay" for content as a function of price. Naturally, lower prices mean more people are willing to pay, and these graphs show how sensitive people are to pricing, and how high prices lead to almost zero willingness to pay. Again, it's really great to have this work being done for Ofcom, and extraordinary that the copyright industries haven't commissioned crucial research like this themselves, since it would have avoided some of their crazy pricing decisions that have played a major part in driving potential customers to unauthorised downloads instead.
There is one other important finding regarding ways to encourage more legal downloads:
Regarding the threat of a letter from their ISP, this appeared to have less of an anticipated effect on behaviour than the factors mentioned above [price and availability]; 22% indicated that a letter suspending their internet access would put them off, falling to 16% for a letter informing them their account had been used to infringe, and 14% for the restricting of internet speed.
This means that the basic idea at the heart of the Digital Economy Act is simply wrong: trying to frighten people into paying for content is unlikely to work (or will require disproportionate measures). Fortunately, the current research also indicates a better alternative: for copyright companies to make more content available at more reasonable prices.
The publication of this report is important for many reasons. First, because of findings like those mentioned above – the pointlessness of sending warning letters, the need for better commercial offerings, and the fact that many of those who download unauthorised material go on to spend far more than those who don't. But in many ways the key aspect of the research is simply that it exists. Let's hope it represents the start of a new era of policy making in this area: one based on economics, not lobbynomics.
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